Philip Hammond claims there are 'no unemployed people' in the UK

Philip Hammond criticised over claim that there are "no unemployed people" in UK.

The chancellor was accused of being out of touch after making the remark.

Hammond under pressure ahead of the Budget on Wednesday.

LONDON — Philip Hammond has been accused of being out of touch in the run-up to this week's Budget after he claimed that there were "no unemployed people" in Britain.

The chancellor made the gaffe on Sunday as he comes under pressure to deliver a Budget that satisfies all wings of the Conservative party, while the UK suffers worsening economic forecasts and uncertainty over Brexit.

Hammond is set to make major proposals to drive up housebuilding in Britain and promise higher investment in science and technology. Hammond is under pressure from Conservative MPs to present an optimistic vision for post-Brexit Britain but is hampered by poor economic forecasts.

Labour's shadow Cabinet Office minister Jon Trickett said the chancellor was "living on another planet" and he is "losing a grip on reality."

Hammond made the claim while attempting to calm fears that growing technology would put more people out of work.

He told the BBC's "Andrew Marr Show": "It's a simple choice: either we embrace change or we try to hide from change and we allow ourselves to slip behind.

"I remember 20 years ago we were worried about what would happen to a million shorthand typists in Britain as the personal computer took over. Nobody has a shorthand typist these days. Where are all these unemployed people? There are no unemployed people. We have created 3.5m jobs since 2010. This economy has become a jobs factory."

There are currently around 1.42 million unemployed people in the UK, despite the number falling since 2010.

Watch Hammond's gaffe:

Labour's shadow chancellor John McDonnell said: "The chancellor thinks there are no unemployed people in this country. Completely out of touch."

Theresa May might come under renewed pressure to sack Hammond after the Budget if Brexit-supporting Conservatives feel it fails to deliver a positive message for Britain's life outside of the European Union.

Last month Tory MP Nadine Dorries accused Hammond of "deliberately" trying to make Brexit talks difficult and said that he should be sacked by Prime Minister May.

She said: "I think Philip Hammond has been deliberately trying to make the Brexit negotiations difficult, stall them, obfuscate the issues. I just don't think he's been 100% on board."

Following his appearance on Marr, Hammond was challenged on his claim by Robert Peston on ITV's "Peston on Sunday."

He said: "Of course, I didn't mean [there is no unemployment]. There's 1.4 million unemployed people in this country and that's 1.4 million too many. But we have record low levels of unemployment. It hasn't been this low since the 1970s.

"But the point I was making to your former colleague Andrew Marr is that previous waves of technological change have not resulted in millions of people being long-term unemployed. They have been reabsorbed into the workforce."

A spokesperson for the Treasury told the Guardian: "Unemployment is at a 40-year low. But as the chancellor made clear, there are still 1.4 million unemployed people in this country and that's 1.4 million too many.

"By embracing and leading the next technological revolution we can lower that number still, and British workers can take up the higher skilled, higher paid jobs of tomorrow."